Defrag Blog

Ahhhh, December - how I love thee. I have this annual tradition in December where I completely suspend work for the last two weeks of the month, and I spend time assessing the past year (how I performed on personal goals; I’m big on writing down goals, etc), and plan out the coming 12 months (as part of a 3 year plan). One of the fun things I do as part of that is look forward for the year with regards to “the defrag space.” And that means, you guessed it, the dreaded “predictions” list.

[It should be noted that I'm not an economist, but that I am friends with a guy who plays a top 10 economist on the internet - for whatever that's worth.]

Drumroll….

1. The term “enterprise 2.0″ is dead - even if those using it won’t recognize that for two years: Trust me on this, these catchy terms outlive their usefulness. Why do you think I name all of the conferences one word names that barely relate to anything they’re about? E2.0 will become “social business” or some other descriptor, but as the technology adoption goes mainstream, these things will matter less and less.

2. Going mainstream means that small is where the innovation lives: The implicit prediction in #1 is, of course, that e2.0 goes mainstream. It does, and accordingly, “small” is where the innovation will live. Small vendors, small initiatives, and small conferences. If you want “mainstream, proven, workable” look for big. If you want “innovative, fresh, new” look for small. Simple.

3. Two topics dominant the e2.0/collaboration/social biz landscape — mobile and APIs (cloud): Mobile, API, mobile, API — just get ready for the refrain because it is coming. “Mobile” because that’s where the workforce is going to live, and all things mobile (platforms, interfaces, etc) are about to become an enterprise obsession. “API” because that’s where the value point is in the cloud. All of these collaboration applications are actually about data (the flow, use and leveraging of it) — and data is all about APIs. [For the record, I was going to add "analytics" in here, but the progress in analytics is so maddeningly slow that I think enterprises will almost give up on getting anything of value from analytics vendors in 2011.]

4. The U.S. economy grows at a surprisingly strong rate in the first half of the year, then flatlines under spending, deficit, inflation worries: It should be noted that my main economic prediction for 2010 (”we finish the year about where we start it on unemployment, etc”) was spot on. So, in that glorious halo of correctness, I throw this out there — QE2 (the fed’s efforts) and the tax cut deal (aka, “Stimulus 2″) are a shot in the arm in the first 6-7 months of 2011. We’ll grow in the 3% range, and the stock market will feel good. By September/October, the talk will be focused so firmly on problems around the spending/deficit/and inflation rearing its ugly head, that things grind to a flatline, and growth settles down in the 1% range. Unemployment never goes below 8% — and, most likely, it goes above 10% again before going down.

5. Tech IPOs return: LinkedIn, Zynga, Twitter, Facebook, Etsy, Groupon, Jive Software — 2011 will see the Tech IPO return. The accompanying liquidity events will send Silicon Valley into a frenzy rivaled only by those silly vampires in those Twilight movies. Talk of an “angel bubble” will ensue. It’ll be correct, of course — but in true Heisenbergian-fashion, the timing will be off. This bubble’s got legs (several years worth of legs). The “new tech bubble” will run well into 2013-2014. This is just the beginning of that craziness. [Corollary: Fred Wilson is the new John Doerr -- just go look at USV's portfolio.]

6. Acquisitions pick-up: Expect the cash to start loosening. Salesforce.com will continue to pick-up pieces that help them in the cloud (look for more heroku-like pick-ups). Oracle will counter by picking up pieces that help them in the e2.0 space (I fully expect either Socialcast or Yammer to be acquired in the first half of the year). And “social media analytics” companies are trendy acquisitions, but they don’t happen for much money.

7. Defrag *shrinks* in size: Okay, but on purpose. We’ve made the decision to cap the attendee count for next year’s show at 325 (a bit less than the head count for this year). We’re doing it because we’ve got the right size community for the types of conversations that we want to have, and focusing on “growing numbers” takes us farther away from what is the clear value at Defrag. While everyone else is giving away free expo floor passes, we’re setting a hard cap on our size — because quality trumps quantity every day of the week and twice on Sunday (when it comes to Defrag anyway).

8. Someone hacks the Microsoft Kinect in such a way as to provide “business value” (awesome videoconferencing): Call it intuition, but the Kinect is going to change a lot of business interactions. 2011 is where the hack starts (by 2012, it’s productized).

9. The “ladders as economic indicators” talk never gets old: And we all show up next year wondering what the new-fangled, Kedrosky indicator will be. Yea, if you weren’t there, you have no idea what I’m talking about with this one. ( I will be starting a “defrag pool” on what the new indicator/data set will be. Winner gets a free ladder!)

Lastly….

10. Defrag 2011 (5th year anniversary) turns out the be the best Defrag yet.